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NAB and AXA extend takeover talks
June 1, 2010 / 1:04 AM / in 8 years

NAB and AXA extend takeover talks

SYDNEY (Reuters) - National Australia Bank (NAB.AX), AXA SA AXA.AX and takeover target AXA Asia Pacific AXA.AX have extended their $11.5 billion acquisition agreement to July 15, giving NAB time to overcome regulatory hurdles to close the five-month saga.

<p>The AXA Asia Pacific logo sign is seen at its headquarters in Melbourne May 31, 2010. REUTERS/Mick Tsikas</p>

The six-week extension, expected by investors, will let NAB propose changes, including asset sales to gain the approval of the Australian competition regulator, which blocked the deal saying it would reduce competition in the world’s fourth biggest, $1 trillion wealth market.

“They can now finalize the sale of assets. After that it seems unlikely for the regulator to come up with something new that it did not cite in its original ruling,” said Martin Duncan, an analyst at fund manager Arnhem Investment Management.

The Australian Competition and Consumer Commission (ACCC) earlier said the deal, the country’s second biggest financial services takeover, would cut competition in the retail investment platform, a software that binds the customer with financial products and the wealth manager.

To alleviate the watchdog’s concerns, NAB may sell retail platforms, such as AXA Asia Pacific’s North and is in talks with smaller wealth manager IOOF Holdings (IFL.AX) and insurer Tower Australia TAL.AX, The Australian newspaper said.

Tuesday’s extension gives NAB an advantage but investors said that asset sales may not necessarily clear the path as the deal also needs the approval of the federal treasurer, who is increasingly concerned over the financial sector being controlled by the country’s four biggest banks.

NAB would not discuss its plans and only said it “continues to pursue its options in relation to the ACCC objections to the proposal.”

A spokeswoman for AMP (AMP.AX), which has also expressed interest in AXA Asia Pacific and was preferred by the ACCC, declined to comment.

Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi

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